Leaving FSMOne
Investment Personal Finance

Why I am leaving FSMOne

Many of you would know that for the past couple of months, I’ve been using FSMOne to regularly purchase S&P 500 ETF (IVV). It was my main strategy for routine and disciplined investment.

I’ve even written a review of FSMOne. In the review, I highly recommended the brokerage as a very affordable and convenient way to set up a Regular Savings Plan (RSP).

One week ago, I’ve however made the decision to completely leave the platform. I have also stopped all my recurring cash top-ups and RSP plans.

In this post, I will be sharing my reasons for leaving FSMOne and it might perhaps help you in making your decision to use the platform for your investments.

Bad Timings and Failed Deductions

Two months ago, I wanted to increase my RSP amount. I was getting a little cash-heavy and wanted to allocate more into equities. To do so, I’ll need to increase the RSP amount and recurring cash top-up amount.

Whenever there is a change in the cash top-up amount, it will cause the next top-up to happen on the 8th. It takes another 2-3 business days for the amount to be processed.

This directly coincides with the RSP purchase date. As a result, my September RSP purchase did not go through.

Based on my previous experience with FSMOne, the following month’s RSP purchase should go through as the second cash top-up onwards usually happens a few days before the 8th.

On the 8th of October, I received another email which said that my purchase did not go through. I did not understand why the cash top-up didn’t go through in time. By then, it was already too exhausting for me to call them up to clarify.

These 2 failed transactions meant that my cash position became even heavier.

That was the last straw for me and I decided to leave the platform.

Too little options for automation

After using StashAway, the automation regime for FSMOne feels very rigid. It’ll only purchase the equity at a fixed date (set by them) every month.

As the user, I do not have the option to change the dates of the purchase. This is a stark contrast to what Robo-Advisors allow us to do, such as setting the exact date and cadence of purchase.

Over a long period of time, this likely wouldn’t matter much. However, in periods of high volatility and uncertainty, the increased cadence of purchase is able to better smoothen out any large price movements.

Saving just a little bit of fees

I have to clarify that FSMOne is still one of the cheapest brokerage for monthly RSPs.

Assuming my RSP is US$500 every month.
FSMOne FX Spread = 0.5 – 1%
Dividend Handling Fee = US$10
Purchase Fees = US$12

If we discount the FX spread as that’s unavoidable, I’m essentially paying US$22 a year for automation.

Although that’s only 0.3% of my total investments, it’s still money that can be saved if I had bought them myself manually through Firstrade.

Conclusion

If you’re someone who doesn’t change the top-up amount frequently, FSMOne is still one of the best choices for RSP due to its low cost.

To avoid missing any RSP purchases, have at least a month RSP worth of cash in your cash account. This way, you can ensure that there will always be sufficient cash for deductions to happen.

I’m personally not comfortable with leaving such an amount of cash untapped. Even though it earns a very small amount of interest with FSMOne, it’s still not sufficient to keep me on their platform.

Moving forward, I’ll be manually purchasing VT and VOO every month on the Firstrade platform. Even though there’ll be some manual work involved, at least I’ll be guaranteed that my purchases go through.

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